FIRSTENERGY CORP
For the period ended Jun 30, 2025. Filed Jul 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 30, 2025
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Jersey Central Power & Light Company
MANAGEMENT’S NARRATIVE DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS
JCP&L is a wholly owned subsidiary of FE. JCP&L conducts business in New Jersey by providing regulated electric transmission and distribution services in northern, western and east central New Jersey. JCP&L procures electric supply to serve its BGS customers through a statewide auction process approved by the NJBPU. JCP&L is subject to regulation by the NJBPU and FERC.
JCP&L's reportable operating segments are comprised of the Distribution and Transmission segments.
The Distribution segment, representing $3.3 billion in rate base as of December 31, 2024, distributes electricity to approximately 1.2 million customers in New Jersey across its distribution footprint. The segment’s results reflect the costs of securing and delivering electric generation to customers, including the deferral and amortization of certain costs.
The Transmission segment includes transmission infrastructure owned and operated by JCP&L and used to transmit electricity, representing $1.4 billion in rate base as of December 31, 2024. The segment’s revenues are primarily derived from forward-looking formula rates, pursuant to which the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on JCP&L’s transmission facilities.
For additional information with respect to JCP&L, please see the information contained in FirstEnergy’s Management’s Discussion and Analysis of Financial Condition and Results of Operations under the following subheadings, which information is incorporated by reference herein: Executive Summary and Recent Developments, Regulatory Assets and Liabilities, Capital Resources and Liquidity, Guarantees and Other Assurances, Market Risk Information, Credit Risk, Outlook and New Accounting Pronouncements.
Summary of Results of Operations—Second Quarter 2025 Compared with Second Quarter 2024
Financial results for JCP&L's business segments for the three months ended June 30, 2025 and 2024, were as follows:
| For the Three Months Ended June 30, 2025 · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues | $573 | $63 | $(44) | $592 |
| Operating Expenses: | ||||
| Purchased power | 303 | — | — | 303 |
| Other operating expenses | 166 | 11 | (44) | 133 |
| Provision for depreciation | 53 | 12 | — | 65 |
| Deferral of regulatory assets, net | (14) | — | — | (14) |
| General taxes | 5 | 1 | — | 6 |
| Total operating expenses | 513 | 24 | (44) | 493 |
| Other Income (Expense): | ||||
| Miscellaneous income, net | 11 | — | — | 11 |
| Interest expense - other | (22) | (8) | — | (30) |
| Interest expense - affiliates | (2) | — | — | (2) |
| Capitalized financing costs | 3 | 7 | — | 10 |
| Total other expense | (10) | (1) | — | (11) |
| Income taxes | 12 | 10 | — | 22 |
| Net Income | $38 | $28 | $— | $66 |
| For the Three Months Ended June 30, 2024 · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues: | $529 | $66 | $(38) | $557 |
| Operating Expenses: | ||||
| Purchased power | 266 | — | — | 266 |
| Other operating expenses | 179 | 17 | (38) | 158 |
| Provision for depreciation | 51 | 11 | — | 62 |
| Deferral of regulatory assets, net | (34) | — | — | (34) |
| General taxes | 5 | 1 | — | 6 |
| Total operating expenses | 467 | 29 | (38) | 458 |
| Other Income (Expense): | ||||
| Miscellaneous income (expense), net | 10 | (9) | — | 1 |
| Interest expense - other | (17) | (5) | — | (22) |
| Interest expense - affiliates | (6) | — | — | (6) |
| Capitalized financing costs | 2 | 4 | — | 6 |
| Total other expense | (11) | (10) | — | (21) |
| Income taxes | 13 | 8 | — | 21 |
| Net Income | $38 | $19 | $— | $57 |
| Changes Between Second Quarter 2025 and Second Quarter 2024 Financial Results · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues | $44 | $(3) | $(6) | $35 |
| Operating Expenses: | ||||
| Purchased power | 37 | — | — | 37 |
| Other operating expenses | (13) | (6) | (6) | (25) |
| Provision for depreciation | 2 | 1 | — | 3 |
| Deferral of regulatory assets, net | 20 | — | — | 20 |
| General taxes | — | — | — | — |
| Total operating expenses | 46 | (5) | (6) | 35 |
| OPERATING INCOME | (2) | 2 | — | — |
| Other Income (Expense): | ||||
| Miscellaneous income (expense), net | 1 | 9 | — | 10 |
| Interest expense - other | (5) | (3) | — | (8) |
| Interest expense - affiliates | 4 | — | — | 4 |
| Capitalized financing costs | 1 | 3 | — | 4 |
| Total other expense | 1 | 9 | — | 10 |
| Income taxes | (1) | 2 | — | 1 |
| Net Income | $— | $9 | $— | $9 |
JCP&L’s Distribution - Results of Operations
Net income was flat in the second quarter of 2025, as compared to the same period of 2024, primarily due to higher rider revenues associated with regulated investment programs and an increase in the tax benefit, partially offset by lower customer usage.
The $44 million increase in total revenues resulted from the following sources:
| For the Three Months Ended June 30, | |||
|---|---|---|---|
| Revenues by Type of Service | 2025 | 2024 | Increase |
| (In millions) | |||
| Distribution services | $269 | $267 | $2 |
| Generation sales: | |||
| Retail | 299 | 257 | 42 |
| Wholesale | — | — | — |
| Total generation sales | 299 | 257 | 42 |
| Other | 5 | 5 | — |
| Total Revenues | $573 | $529 | $44 |
Distribution services revenue increased $2 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to higher revenues from the implementation of the base rate case and higher rider revenues associated with certain regulated investment programs, partially offset by lower customer usage and demand as a result of the milder weather temperatures.
Generation sales revenues increased $42 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to higher non-shopping generation auction rates, partially offset by increased shopping and the milder weather temperatures, which decreased retail sales volumes. Total generation provided by alternative suppliers as a percentage of total MWh deliveries in the second quarter of 2025, as compared to the same period of 2024, increased to 40% from 38%. Retail generation sales have no material impact to earnings.
Total operating expenses increased by $46 million primarily due to:
Purchased power costs, which have no material impact to earnings, increased by $37 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to higher unit costs, partially offset by lower sales volumes.
Other operating expenses decreased $13 million in the second quarter of 2025, as compared to the same period of 2024, primarily due to lower storm restoration expenses of $19 million, which were mostly deferred for future recovery.
Higher energy efficiency and other state mandated program costs of $4 million, which were deferred for future recovery, resulting in no material impact to earnings; and
Higher other operating expenses of $2 million, primarily due to higher employee benefit costs, partially offset by increased construction support and lower maintenance work.
Depreciation expense increased $2 million in the second quarter of 2025, as compared to the same period of 2024, primarily due to a higher asset base.
Deferral of regulatory assets, net decreased $20 million in the second quarter of 2025, as compared to the same period of 2024, primarily due to a $23 million decrease from lower deferral of storm related expenses, and a $7 million decrease due to the absence of the amortization of a regulatory liability related to customer refunds in 2024, partially offset by a $5 million net increase from lower generation and transmission related deferrals and $5 million related to net increases in other deferrals.
Total other expenses decreased $1 million in the second quarter of 2025, as compared to the same period of 2024, primarily due to higher capitalized interest and lower interest on short-term borrowings, partially offset by long-term debt issuances since the second quarter of 2024.
The distribution segment's effective tax rate for the three months ended June 30, 2025 and 2024, was 24.0% and 25.5%, respectively. The decrease in the effective tax rate is primarily due to an increase in the tax benefit from AFUDC equity flow-through.
JCP&L’s Transmission - Results of Operations
Net income increased $9 million in the second quarter of 2025, as compared to the same period of 2024, primarily due to higher revenues from regulated transmission investments that increased rate base, higher capitalized financing costs and the absence of a non-recoverable charge related to an abandoned transmission project in the second quarter 2024.
Transmission revenue decreased $3 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to recovery of lower transmission operating expenses, partially offset by a higher rate base.
Total operating expenses decreased by $5 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to lower operating and maintenance expenses, partially offset by higher depreciation and property tax expenses from a higher asset base. Nearly all operating expenses are recovered through formula rates, resulting in no material impact on current period earnings.
Total other expenses decreased by $9 million during the second quarter of 2025, as compared to the same period of 2024, primarily due to the absence of a non-recoverable charge related to an abandoned transmission project in the second quarter 2024 and higher capitalized financing costs, partially offset by higher interest expenses on debt issuances since the second quarter of 2024.
The transmission segment's effective tax rate for the three months ended June 30, 2025 and 2024, was 26.3% and 29.6%, respectively. The decrease in the effective tax rate is primarily due to an increase in the tax benefit from AFUDC equity flow-through.
Summary of Results of Operations —First Six Months of 2025 Compared with First Six Months of 2024
Financial results for JCP&L's business segments for the six months ended June 30, 2025 and 2024, were as follows:
| First Six Months 2025 Financial Results · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues | $1,121 | $124 | $(87) | $1,158 |
| Operating Expenses: | ||||
| Purchased power | 601 | — | — | 601 |
| Other operating expenses | 340 | 25 | (87) | 278 |
| Provision for depreciation | 106 | 24 | — | 130 |
| Deferral of regulatory assets, net | (36) | — | — | (36) |
| General taxes | 11 | 1 | — | 12 |
| Total operating expenses | 1,022 | 50 | (87) | 985 |
| Other Income (Expense): | ||||
| Miscellaneous income, net | 23 | — | — | 23 |
| Interest expense - other | (44) | (15) | — | (59) |
| Interest expense - affiliates | (3) | — | — | (3) |
| Capitalized financing costs | 6 | 13 | — | 19 |
| Total other expense | (18) | (2) | — | (20) |
| Income taxes | 21 | 17 | — | 38 |
| Net Income | $60 | $55 | $— | $115 |
| For the Six Months Ended June 30, 2024 · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues: | $981 | $118 | $(76) | $1,023 |
| Operating Expenses: | ||||
| Purchased power | 514 | — | — | 514 |
| Other operating expenses | 390 | 31 | (76) | 345 |
| Provision for depreciation | 101 | 22 | — | 123 |
| Deferral of regulatory assets, net | (73) | — | — | (73) |
| General taxes | 10 | 1 | — | 11 |
| Total operating expenses | 942 | 54 | (76) | 920 |
| Other Income (Expense): | ||||
| Miscellaneous income (expense), net | 21 | (9) | — | 12 |
| Interest expense - other | (40) | (12) | — | (52) |
| Interest expense - affiliates | (10) | — | — | (10) |
| Capitalized financing costs | 4 | 9 | — | 13 |
| Total other expense | (25) | (12) | — | (37) |
| INCOME BEFORE INCOME TAXES | 14 | 52 | — | 66 |
| Income taxes | 3 | 14 | — | 17 |
| Net Income | $11 | $38 | $— | $49 |
| Changes Between First Six Months Ended 2025 and First Six Months Ended 2024 Financial Results · Reconciling | ||||
|---|---|---|---|---|
| (In millions) | Distribution | Transmission | Adjustments | JCP&L |
| Revenues | $140 | $6 | $(11) | $135 |
| Operating Expenses: | ||||
| Purchased power | 87 | — | — | 87 |
| Other operating expenses | (50) | (6) | (11) | (67) |
| Provision for depreciation | 5 | 2 | — | 7 |
| Deferral of regulatory assets, net | 37 | — | — | 37 |
| General taxes | 1 | — | — | 1 |
| Total operating expenses | 80 | (4) | (11) | 65 |
| OPERATING INCOME | 60 | 10 | — | 70 |
| Other Income (Expense): | ||||
| Miscellaneous income (expense), net | 2 | 9 | — | 11 |
| Interest expense - other | (4) | (3) | — | (7) |
| Interest expense - affiliates | 7 | — | — | 7 |
| Capitalized financing costs | 2 | 4 | — | 6 |
| Total other expense | 7 | 10 | — | 17 |
| Income taxes | 18 | 3 | — | 21 |
| Net Income | $49 | $17 | $— | $66 |
JCP&L’s Distribution - Results of Operations
Net income increased$49 million in the first six months of 2025, as compared to the same period of 2024, primarily due to higher revenues from the implementation of the base rate case in February 2024, the absence of a $53 million charge in connection with the base rate case settlement agreement, as further discussed below, higher customer usage and demand, higher rider revenues associated with regulated investment programs and lower financing costs, partially offset by higher operating expenses.
The $140 million increase in total revenues resulted from the following sources:
| For the Six Months Ended June 30, | |||
|---|---|---|---|
| Revenues by Type of Service | 2025 | 2024 | Increase / (Decrease) |
| (In millions) | |||
| Distribution services | $535 | $483 | $52 |
| Generation sales: | |||
| Retail | 576 | 485 | 91 |
| Wholesale | 1 | 2 | (1) |
| Total generation sales | 577 | 487 | 90 |
| Other | 9 | 11 | (2) |
| Total Revenues | $1,121 | $981 | $140 |
Distribution services revenue increased $52 million during the first six months of 2025, as compared to the same period of 2024, primarily due to higher revenues from the implementation of the base rate case in February 2024, higher customer usage as a result of the colder weather temperatures in the first quarter, and higher rider revenues associated with certain regulated investment programs, partially offset by lower customer usage and demand as a result of milder weather temperatures in the second quarter.
Generation sales revenues increased $90 million during the first six months of 2025, as compared to the same period of 2024, primarily due to higher non-shopping generation auction rates. Retail generation sales have no material impact to earnings.
Total operating expenses increased by $80 million primarily due to:
Purchased power costs, which have no material impact to earnings, increased by $87 million during the first six months of 2025, as compared to the same period of 2024, primarily due to higher unit costs.
Other operating expenses decreased $50 million in the first six months of 2025, as compared to the same period of 2024, primarily due to:
The absence of a $53 million pre-tax charge at JCP&L in the first quarter 2024 associated with certain corporate support costs recorded to capital accounts from the FERC Audit that were determined, as a result of the base rate case settlement agreement, to be disallowed from future recovery; and
Lower storm restoration expenses of $24 million, which were mostly deferred for future recovery.
Higher uncollectible expenses of $4 million, which were deferred for future recovery;
Higher energy efficiency and other state mandated program costs of $17 million, which were deferred for future recovery, resulting in no material impact to earnings; and
Higher other operating expenses of $6 million, primarily due to severance and related costs associated with FirstEnergy’s organizational changes announced in the first quarter of 2025 and higher employee benefit costs, partially offset by increased construction support and lower maintenance work.
Depreciation expense increased $5 million in the first six months of 2025, as compared to the same period of 2024, primarily due to a higher asset base.
Deferral of regulatory assets, net decreased $37 million in the first six months of 2025, as compared to the same period of 2024, primarily due to a $27 million decrease from lower deferral of storm related expenses and a $17 million decrease due to the absence of the amortization of a regulatory liability related to customer refunds in 2024, partially offset by a $2 million net increase from higher generation and transmission related deferrals and $5 million related to net increases in other deferrals.
Total other expenses decreased$7 million in the first six months of 2025, as compared to the same period of 2024, primarily due to lower interest on short-term borrowings and higher capitalized interest, partially offset by long-term debt issuances.
The distribution segment's effective tax rate for the six months ended June 30, 2025 and 2024, was 25.9% and 21.4%, respectively. The increase in the effective tax rate is primarily due to the absence of the tax impact from the $53 million pre-tax charge in the first quarter of 2024 noted above.
JCP&L’s Transmission - Results of Operations
Net income increased $17 million in thefirst six months of 2025, as compared to the same period of 2024, primarily due to higher revenues from regulated transmission investments that increased rate base, higher capitalized financing costs and the absence of a non-recoverable charge related to an abandoned transmission project in the second quarter 2024.
Transmission revenue increased $6 million during the first six months of 2025, as compared to the same period of 2024, primarily due tohigher revenues from regulated transmission investments that increased rate base, partially offset by recovery of lower transmission operating expenses.
Total operating expenses decreased by $4 million during the first six months of 2025, as compared to the same period of 2024, primarily due to lower operating and maintenance expenses, partially offset by higher depreciation and property tax expenses from a higher asset base. Nearly all operating expenses are recovered through formula rates, resulting in no material impact on current period earnings.
Total other expenses decreased by $10 million during the first six months of 2025, as compared to the same period of 2024, primarily due to the absence of a non-recoverable charge related to an abandoned transmission project in the second quarter 2024 and higher capitalized financing costs, partially offset by higher interest expenses on debt issuances since the second quarter of 2024.
The transmission segment's effective tax rate for the six months ended June 30, 2025 and 2024, was 23.6% and 26.9%, respectively. The decrease in the effective tax rate is primarily due to an increase in the tax benefit from AFUDC equity flow-through.
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